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Taiwan suggests suffering IT vendors try China, Africa and India

No prospects in the US and Europe

Cebit 09 Taiwan's IT cheerleader-in-chief claimed today the country's IT sector should come through the current financial crisis unscathed, if it can wean itself away from the cash-strapped consumers of the US and Europe.

Peter Huang, executive vice president of the Taiwan External Trade Development Council, admitted the country's status as the IT workshop of the world hasn't protected it from the economic downturn. The country had been expecting ten per cent growth in the sector last year. In the event, it was 3.6 per cent, and that positive figure masked a 24.7 per cent plunge in the fourth quarter.

That's the kind of (negative) growth rates you'd expect from a car manufacturer or major bank, not the world's leading IT exporter. Representatives of companies including Asus, Genius and Aiptek, there as part of a beauty parade of Taiwanese IT vendors hosted by Huang, all used the phrase “tsunami” to describe the current economic crash.

But Huang insisted that the country was well positioned to bounce back from the crisis, describing it as a “bear in hibernation”.

“When the spring comes, we will shake off the winter blues,” he claimed.

Asked when said spring was likely to come, he admitted “that's the $6m question”. But he insisted, the country's government was doing everything it could to ensure the nation's IT sector could hold on in the meantime, providing retraining, export support, and by leaning on banks to refinance loans to the more over-extended players.

Everything in fact short of handing manufacturers wads of cash, if only because international trade rules prohibit direct state support.

In the meantime, he said the country's IT vendors should focus on emerging markets that could still afford to blow money on netbooks and pico projectors, such as the Middle East, Africa and India. And China. While Taiwan has long used its cantankerous larger neighbour as a manufacturing plant, Huang said it was now emerging as a market in its own right.

Huang said things should start picking up in the second half of the year as Taiwanese companies begin to exploit these markets.

But whatever happens, he insisted that while some companies will suffer, the key Taiwanese players would all still be around once the crisis has passed.

However, Kenneth Morgan, professor at large at the University of Australia, said all the Asian players seemed to be in denial about the extent of the global credit crisis and its effect on them and their customers. “They all describe it as a tsunami. They don't realise the second wave is right behind them.” ®